Japanese Firm Pays $45M In U.S. Import Cheating Case

RALEIGH, N.C. (AP) -- A Japanese producer of violet coloring for inks and plastics is paying more than $45 million to settle allegations it falsely described where the products were made to avoid U.S. import duties on Chinese and Indian makers, the Justice Department said Monday.

The settlement with Toyo Ink SC Holdings Co. Ltd. and its affiliates in New Jersey and Illinois comes three years after a South Carolina competitor filed a lawsuit in Charlotte.

The U.S. Commerce Department found that Indian companies making the violet pigment were unfairly subsidized by their government and Chinese producers were dumping their product in the U.S. at below fair value. The pigment is mostly used to color inks, but also textiles, plastics and other materials.

A 2009 lawsuit filed by John Dickson, CEO of Nation Ford Chemical Co. in Fort Mill, S.C., alleged that Toyo Ink misrepresented that its U.S. imports of the pigment were coming from Japan or Mexico to avoid import duties assessed on the material actually coming from China and India. Dickson will collect nearly $7.9 million under a federal law that allows private citizens to sue on behalf of the United States and share in any recovery, the government said. The government joined the lawsuit earlier this year.

"There was a huge amount of work on my part to develop the case," Dickson said. "Forty-five million dollars is no small piece of change."

Dickson said he spent thousands of hours collecting Chinese export data, having it translated, and analyzing the information to assemble the evidence backing his lawsuit.

A lawyer representing Toyo Ink did not respond to a phone call and email seeking comment.

The Justice Department said the settlement shows it will pursue those who avoid paying the government what it's owed.

"Importers seeking access to United States markets must comply with the law, including the payment of customs duties meant to protect domestic companies from unfair competition abroad," Stuart F. Delery of the agency's civil division said in a statement.